Cody Willard: If it’s a tech bubble, I’m buying it

By Cody Willard

To find out which tech stocks I am buying and what options I’m using to maximize my profits, please check out TradingWithCody.com.

Are we in a tech bubble already or not? Just because every bear you talk to and even the cover of the Economist say we are already in a huge tech bubble and every news paper article you read gives the obligatory “what some are calling signs of a bubble” quote already right now in May 2011 doesn’t mean we are in a bubble. Indeed, if anything, all these bubble rumblings are probably indicators that we’re not in a bubble at all. At least not yet.

Let’s go back and look at the Great Telecom/Tech/DotCom Bubble of the 1990s for some history.

Even as far back as 1994 and especially in 1995 when Netscape first came public, most main stream analysis and media were wondering if tech was already in a bubble. Here’s a look at the frequency of news articles from 1994 to 1999 with both the words, “tech bubble”:

And here are a couple quotes from a few sample news articles talking about the “bubble” in 1995:

The tech-stock bubble Tampa Tribune – ProQuest Archiver – Aug 11, 1995 Don’t say there weren’t warnings that technology stocks were getting out of hand . The latest: the speculative frenzy over a company that helps us browse the …

Will Tech Fund Bubble Burst Soon? . Sunday Times-Sentinel – Google News Archive – Sep 17, 1995 Technology funds are showing some of the most powerful returns the industry has seen in years. If only we’d all been smart enough to know that in January. …

Yup, everybody was so smart and so smug saying that tech was already in a bubble as early as 1995. What happened to tech stocks from 1995 to 2000? The tech-heavy Nasdaq was up some 600% in the sixteen quarters from the end of 1995 to the end of 1999:

Eventually even the biggest bears got buried as they kept fighting that bubble or they eventually decided like everybody else that the trends were going to last forever.

There are currently 2060 recent articles that come up when you search Google News for the term “tech bubble”:

Now, where have you ever seen headlines like this before:

Does Zynga’s IPO Mean a New Tech Bubble Is Inflating? ‎PC Magazine – Peter Pachal – 16 hours ago All this enthusiasm for tech companies going public begs the question: Are we in another tech bubble? Marc Schidler at Forbes thinks so, saying, …

The Evolution Of The Tech Bubble ‎The Business Insider – 3 hours ago But I will introduce the general phases a new technology (paradigm) … At some point, the bubble has to burst. Things that go up must come back down. …

How many investors and traders and people at home missed out on huge fortunes because they were scared out of the burgeoning tech bubble when everybody was “warning” them that “tech is already in a bubble” back in 1995.

My analysis says that we need to ignore the people who think “tech is already in a bubble” in 2011. Indeed, I expect we will look back in 2013 and 2014 and be thankful that we ignore the noise and tried to capitalize on the biggest marketplace in the history of the planet, the app/smartphone/tablet/cloud marketplace, when it was still early in the game.

And again, even though we’ve had some huge homeruns betting on these revolutions already, the only guarantee I can give you is that I’ll remain focused and disciplined and that I’ll be doing everything I can to find us the best stocks and the best options to maximize our profits along the way.

If you’d like to find out how I’m building my own personal portfolio with eighteen long and short stocks, including what options I’m using, please check out TradingWithCody.com.

At time of publication, Willard, author of Revolution Investing and Trading With Cody, was net long Apple and Google though positions can change at any time. None of the information in this column constitutes a recommendation by Willard of any particular security or trading strategy is suitable for any specific person.

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About The Cody Word

Cody Willard writes the Revolution Investing investment newsletter for MarketWatch and posts the trades from his personal account at TradingWithCody.com He is the founder of WallStreetAll-Stars.com and the principal of CL Willard Capital. Cody serves as an adjunct professor at Seton Hall University and is on the University of New Mexico Alumni Board. He was an anchor on the Fox Business Network, where he was the co-host of the long-time #1-rated show on the network, Fox Business Happy Hour. Cody, a former hedge fund manager, and his stock picks and economic outlooks have been featured on NBC’s The Tonight Show with Jay Leno, ABC’s 20/20, CBS Evening News, CNBC’s SquawkBox, Jon Stewart’s The Daily Show, as well as in the Financial Times, Wall Street Journal, New York Times, and many other outlets.